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D2C Brands Manage Rising Costs With Bulk Buys, Selective Hikes

D2C Brands Manage Rising Costs With Bulk Buys, Selective Hikes
D2C consumer brands turn to bulk buys, selective price hikes amid input cost pressure · financialexpress.com

Some online consumer brands are paying more for materials, packaging and delivery.

To control costs, they are buying supplies in larger quantities and improving their warehouses and supply chains.

Plum and Kapiva have raised some prices because they could not absorb all the extra costs.

Open Secret bought materials before prices rose and added warehouses to reduce delivery expenses.

Kapiva also began offering buy-now-pay-later payments.

About one-fifth of its prepaid orders later moved to this payment option.

The brands said customers have not significantly reduced their purchases after the price increases.

They do not currently plan more increases, although future changes could take time to reach stores because existing inventory remains.

Key facts

Brands discussed
Plum, Open Secret and Kapiva
Main cost pressures
Input materials, packaging, logistics and cost of goods
Price increases
Selective and largely in the single-digit range
Open Secret warehouses
Expanded from one warehouse to three
Kapiva BNPL timing
Introduced about six months ago
Kapiva BNPL shift
Around 20% of prepaid transactions shifted to BNPL
Demand impact
The brands reported no significant slowdown after recent price increases

Quotes

Shankar Prasad

Founder of Plum

“The last resort was obviously to increase prices, which is also something that we have done”
financialexpress.com
“There is no denying that there is pressure on input costs”
financialexpress.com

Sources

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